IE 11 is not supported. For an optimal experience visit our site on another browser.

'Hardball with Chris Matthews' for January 28, 2009

Read the transcript to the Wednesday show

Guest: Rep. Darrell Issa, Dick Armey, Joan Walsh, Bob Herbert, Michelle Bernard High: The House of Representatives prepares to vote on Obama‘s economic stimulus bill.

CHRIS MATTHEWS, HOST:  Show me the money.  Congress votes on the stimulus bill.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight, showtime.  Eight days after inauguration, Barack Obama gets Congress to vote on his big bill aimed at pulling the American economy back from the abyss of depression.  With a huge majority in the House, Obama starts with a quick and easy victory tonight.  Tougher will be getting the mammoth measure through the Senate, where members‘ six-year terms protect them from voter reprisals.

To woo Republicans, the new president sang their oldie but goody, It all depends on business.  All government can do is create the right business climate.  Here he is.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  All we can do, those of us here in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive and our economy can grow.  And that is exactly what the recovery plan I‘ve proposed is intended to do and that‘s exactly what I intend to achieve soon.


MATTHEWS:  Well, Republicans showed up with shined shoes and smiles all around and they‘re saying nice things about the popular president before the cameras, but also lining up Republican-style to vote against his most important bill.

And the fact is, there are real questions about the big Obama bill. 

How can we expect a 1 percent impact on the country‘s economy—that‘s the

total here amount of tax cuts and spending hikes in the current fiscal year

to turn around a $13 trillion economy?  Some on the left say it‘s not big enough to do the job millions of Americans are counting on.  Some on the right say it lacks the immediate punch the economy needs to turn around.  Who‘s right?  CNBC‘s Jim Cramer breaks it down and tells us whether this thing‘s actually going to work later.

Apparently, some things and some people are sacred.  Why are Republicans afraid to separate themselves from Rush Limbaugh?  Why would an elected U.S. congressman have to apologize for simply saying that the radio talk show guy doesn‘t speak for the party?

And are the Democrats going to investigate Karl Rove?  They‘ve subpoenaed him.  He‘s got till Monday to respond.

And on a winter wonderland day here in Washington, President Obama, that Chicago man, mocks the sugarplums here who can‘t deal with icy weather and certainly can‘t drive in it.  That‘s ahead in the “Sideshow.”

But we begin with the stimulus vote and two members of the U.S. House from California.  First, Republican Darrell Issa.  Congressman, you put out a very tough piece here.  You say this thing won‘t work.  Are you saying that a year from now or a year-and-a-half from now, the economy is not going to be better off because you‘re right and Obama‘s wrong?  Is that what you‘re saying?

REP. DARRELL ISSA ®, CALIFORNIA:  No.  Actually, what I‘m saying is, a little bit like George Washington who died when people bled him, you know, if he had lived, they would have said that bleeding him is the reason that George Washington lived.  The fact is, there‘s nothing—very little in this bill that‘s a stimulus.  There‘s $137 billion for 32 new federal programs.  There‘s redistribution of wealth to people who ultimately spend all they receive as it is.

And most importantly, what I think your listeners should understand is a lot of these programs are simply pent-up programs like IDEA that help, to be honest, children with disabilities, but there‘s no new money because when these dollars arrive, the states simply will reduce what they spend, which means no net new money.  You can‘t call it stimulus if it‘s not going to be net new money.

MATTHEWS:  Well, what about all the big shovel jobs, all the bridge building, highway money, all the tax cuts?  What about that?

ISSA:  Well, first of all, the $5 billion for the Corps of Engineers per year, the roughly 12 percent of this bill that does any shovel-ready programs, I commend the vast majority of them.  It‘ll take a while to look through and see where the waste, fraud and abuse is, but a lot of these are good ideas.  And beginning to rebuild our infrastructure in this country is a good idea, even if it isn‘t in a stimulus package.  But that‘s about where this ends.

When you talk about tax cuts, remember that one of the biggest chunks of these tax cuts are, in fact, rebate money to people that will take them down to net no money, not even into their retirement.  Nothing wrong with that, but all it really is about as silly as the $600 checks that we sent out in the previous Congress that ultimately people did exactly the same thing.  They either put it in the bank account or they spent it, but it didn‘t change their behavior or their confidence.

MATTHEWS:  Are you agreeing with Rush Limbaugh‘s argument, or is he agreeing with you, that the whole strategy here of Obama is to basically get poor people out of paying any taxes whatsoever, income taxes or even payroll taxes because they get a big credit against their payroll taxes, so that they‘ll vote Democrat the rest of their lives?  Is that what you‘re saying here?

ISSA:  Well, I don‘t want to make this partisan, and I didn‘t hear those comments from Rush Limbaugh.  What I do believe is that when we look at what is a stimulus factor—the president has said that it‘s all about public confidence.  Very little in this bill really is going to turn into public confidence, including, quite frankly, those rebates in the tax program.

If we had investment tax credits the way we did in the ‘80s, where you could track the credit against new investment, then, in fact, people could have confidence that those new machines would be bought, the hybrid production lines that GM, Ford and Chrysler might need would have buyers.  Right now, there‘s no investment money here.  There‘s nothing that‘s going to cause somebody in Canada to move their factory to the United States or to hire new people.  That‘s what‘s missing from this stimulus package.

MATTHEWS:  Do you think we need to return to the economic policies of the last eight years?  Do you think we‘d be better off with Bush economics right now?

ISSA:  Not at all.


MATTHEWS:  No, should we have more of what you guys were giving us for the last eight years?  Should we have more of that?  Is that better for the economy, what you guys have been doing?  I‘m serious.

ISSA:  No.  And I appreciate it, Chris.  My voters have made it very clear that they do not want Democrat-lite.  What they really want is a return to Republican values.  That was pretty much missing on the economic side of the last eight years.  It has to come back.

The truth is that the misconduct, if you will, of overspending during the Bush years does not justify further overspending during the Obama years.  President Obama talks like a conservative.  We as Republicans have an opportunity to work with him so that we both act like conservatives.  Regardless of which party‘s in power, we cannot continue borrowing money as though that adds any ability for Americans to get loans on their homes.  Remember that what we...

MATTHEWS:  Why should the public listening right now—I‘m just asking a tough question because you know the answer—trust you guys after eight years to do what you didn‘t do?  And you‘re saying the next eight years, you‘re going to be different.  Don‘t judge us by what we‘ve done the last eight years.  There‘s an old political expression in New York, Before somebody tells you what they‘re going to do, first ask them what they‘ve done.  And what you‘ve done for eight years is bring us to economic catastrophe.  And now you‘re saying, Trust us to try some other way, but don‘t trust the new guys.

ISSA:  Well, first of all, if the new guys do what they say they‘re going—they were going to do and they had transparency, if there wasn‘t so much earmark and pork in this bill, we wouldn‘t be saying there was because, quite frankly, we did learn from our mistake.  Just like somebody you put in prison for committing a crime, Republicans were voted out for not acting like Republicans.

And I think we‘ve owned up to it.  And for the most part, we‘ve said, Look, we were wrong.  We were wrong to go along with the last president on spending bills one after another.  We ran up the cost of government over and above the war on terror, and we shouldn‘t have.  But that doesn‘t change the fact that today we are talking about the new administration and the new Democrat Congress that is making our spending look like peanuts.

MATTHEWS:  Well, what in the bill do you like?  You said you like the Army Corps of Engineers shovel-ready projects.  That‘s about $5 billion.  Is there anything else in there you would vote for, if it was by itself?

ISSA:  Look, I would vote for not just a two-year but a long-term goal to put the hundreds of billions of dollars into highway construction and infrastructure rebuilding.  And I would do as much of it as I could in the first two years, at a time when prices are cheap and workers are laid off.  And I think the public would be confident if we said we‘re going to rebuild America and we couldn‘t do it all in two years, it would be fine to take longer.

Beyond that, I think that we should have the kind of targeted investment that forces people sitting on the sidelines with their own money to make the right decision, which is investing in those areas that we‘re willing to share that cost.  That‘s where targeted investment tax credits make sense, something that‘s not in this bill.

MATTHEWS:  OK.  Let me ask you to tell me what‘s wrong with this thinking.  Classic Keynesian Democratic economics is this.  If consumption goes down because people aren‘t buying anything, they‘re scared, and if business stops investing, that goes down, then government has to pick up the slack and start spending money or else give big tax cuts to people so they‘ll spend money.  Isn‘t that the idea behind this stimulus package, government spending to offset the lack of spending by the consumer and the investor?

ISSA:  Well, if it was, then more of this spending would actually occur in the first two years.  You know, some of the spending won‘t even actually be spent until President Obama‘s second term.  But I think the problem with this analysis is we‘re not spending money that we‘re willing to tax the American people for, we‘re simply spending borrowed money.  And that is drying up the long-term ability to get the kind of capital formation in this country we need.

So I don‘t disagree with money spent during a recession on things which we then can cut back on.  If you build new roads or fix roads today, you can coast again at some time in the future, if you need to.  But if you simply say, Well, we‘re going to add more money to what we give the states for special ed and other programs, nothing wrong with that except it‘s not something you‘re going to be able to cut back, and it‘s certainly not something that is net new spending.

MATTHEWS:  Yes.  I get the feeling the government is going to print money and not allow this crowding out you‘re worried about.  I think they‘re going to monetize this debt, aren‘t they?  Aren‘t they going to create more money to pay for these projects, the government?

ISSA:  Chris, I was in the Army in the late ‘70s and went into business in 1980.  And you remember those times.  The fact is that if they do that, we‘ll have runaway inflation, the dollar will fall precipitously against other currencies, and public confidence around the world will leave us.  So yes, we could do that.  That‘s always the final outcome.  But it didn‘t work for the Germans after two world wars.  It won‘t work for us.  Monetizing our debt simply puts us in a runaway inflation it could take us decades to recover from.

MATTHEWS:  We‘re in the right area here, Congressman, because neither one of us know.  But I‘m suspicious that maybe that‘s what we‘re going to do, inflate the economy, get home values going up again.  Home values go up, that means banks are willing lend money for people to buy homes.  People buy homes, they make more money.  Maybe the country wants a little inflation right now.  We‘ll see.  It‘s hard to have a little of it, I know.

ISSA:  It‘s very hard.

MATTHEWS:  A little is OK.  But sometimes a little is necessary because we have a deflationary situation right now.  Anyway, thank you very much, Congressman Darrell Issa of California.

ISSA:  Thanks, Chris.

MATTHEWS:  Coming up: Politics aside, will the stimulus work?  And how fast before it starts seeing results?  Millions of people are, by the way, hoping this plan‘s going to turn around this rotten economy right now.  CNBC‘s Jim Cramer tells us whether it will, and we‘re going to talk about that when we come back with Cramer.

You‘re watching HARDBALL, only on MSNBC.



OBAMA:  Most of the money that we‘re investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving three million to four million new jobs.  And the vast majority of these jobs will be created in the private sector because, as these CEOs well know, business, not government, is the engine of growth in this country.


MATTHEWS:  Welcome back to HARDBALL.  So what‘s the stimulus package going to actually do?  And how will it get the economy back on track and how fast?  Jim Cramer‘s our expert.  He‘s the host of CNBC‘s “Mad Money,” author of “Real Money: Sane Investing in an Insane World.”

Well, I need very sane advice for the people watching and for me, real simple questions.  I want you to answer them, Jim, if you don‘t mind.  According to the money that‘s out there now, $169 billion of this stimulus plan they‘re going to pass tonight in the House is going to be spent or take effect in tax cuts this year, this fiscal year that ends at the end of September.  That‘s about 1 percent of GDP.  Is that enough boost for the economy to turn around?

JIM CRAMER, HOST, CNBC‘S “MAD MONEY”:  No, not with this economy.  I mean, this is one where every single headline of every company has been about how many thousands of people they lay off.  I mean, this is the quotient of the number of people laid off versus the number of people who can benefit from that and the amount—no, Chris, not nearly enough, not even a fraction.

MATTHEWS:  Well, that‘s the question, then.  I mean, so the Republicans are right when they say there‘s not enough juice in it?

CRAMER:  Yes, they are.  I mean, look, let‘s just take the infrastructure number.  Do you know that—it‘s $30 billion for infrastructure for bridges.  The Big Dig cost $22 billion, I mean one thing, and it only put 5,000 people to work.  This is small-time think.  All the companies I deal with, the steel companies, all the companies involved in manufacturing, they cannot believe how small this is.  It‘s not going to put a lot of people to work.

MATTHEWS:  So the liberals, the netroots, people that you might say on the left, they‘re mad it‘s not enough.  The conservatives are mad it‘s not enough.  Who‘s happy with this number, this stimulus package that‘s getting passed by the House tonight?

CRAMER:  Frankly, I don‘t know anyone in my world of either actual companies, Main Street, or Wall Street, who thinks this is the enough.  It‘s not going to—it may keep people in their jobs a little bit longer. 

It‘s not going to create a lot of jobs.

And I think people do not understand, Chris, the number of jobs being crunched every day in this country—you see the big headlines of companies.  That‘s small change versus all the smaller companies that are laying people off or making them part-time.  I think this problem is much bigger than the president realizes.

MATTHEWS:  Well, that‘s what I don‘t understand and that‘s my big conundrum.  We got about a $13 trillion economy, $55 trillion world economy.  We‘re talking here about squat, it seems, in terms of...


MATTHEWS:  Let‘s take a look here.  Here‘s the president making his case.  Let‘s give him his shot.  Here he is.


OBAMA:  The businesses that are shedding jobs to stay afloat, they can‘t afford inaction or delay.  The workers who are returning home to tell their husbands and wives and children that they no longer have a job and all those who live in fear that their job will be next on the cutting blocks, they need help now.  They are looking to Washington for action, bold and swift.  And that is why I hope to sign an American recovery and reinvestment plan into law in the next few weeks.


MATTHEWS:  The total amount of dollars involved in this plan, going over the most recent numbers, as I said, $169 billion between now and the end of September.  Then $356 billion next year, the year that begins October 1st of this year, and then $174 billion in the subsequent year.  Now, that‘s total impact of all the tax cuts and all the spending hikes. 

It‘s not enough, is it.

CRAMER:  No!  We‘ve got to be thinking like China, which is thinking much bigger.  You have to be thinking about 20 percent of the GDP.  If we get to 10 percent unemployment, all bets are off on this economy.  All the credit card debt that we see is going to roll over.  Autos are going to roll over.  We need to be thinking like the Chinese.

Even Singapore, which is very good—a country that has got great fiscal responsibility, is putting much more money into their situation.  We need to take a look at what our—well, I don‘t want to call it our trading partners in China are doing because they‘re serious.  I don‘t regard us as serious with this amount of money.

MATTHEWS:  OK, who‘s the best person to give a tax cut to, a poor person who lives paycheck to paycheck, who may not even have a paycheck, who only really pays payroll taxes—they pay Social Security and Medicare, they don‘t really get hit for income taxes—is it better to give them a thousand bucks because they‘re going to go out and spend on shoes and food, or is it better to give it to a middle class family that may spend it on—well, they may spend it on something—go out for dinner one night, they may spend it on tuition bills, they may spend it on medical bills, whatever—who‘s going to spend the most percentage of the money that (ph) gives them and spend it on things that‘s going to get the economy rolling again, not just wasting it?

CRAMER:  I‘ll be honest, not that I like this, but the middle class will actually just stick it in the bank because that‘s how—that is actually how jittery and how frozen in recession mindset the middle class are.  The people who do not have a lot of money will go spend that right now.  So if you want to put that money into the economy, you do that.

Of course, you and I both know this is not a solution.  We need to create longer-term jobs.  We need to—we have so much infrastructure that we could fix here.  That number has to be 10 times.  Chris, 10 times in infrastructure...


MATTHEWS:  ... go back to that—OK.  I don‘t want to get over your head here, but why in the world aren‘t we doing what they said we were going to do, build bridges, factory jobs, replace the smell of decay with the smell of construction, the cranes out, the trucks out?  Why don‘t they spend all the money either on tax cuts for people who need the money and/or building stuff?  Why is it all going into all this sort of cats and dogs programs?

CRAMER:  I—I was shocked. 

I mean, I had Eric Schmidt on, who is the CEO of Google.  And we were all excited about all the money is going to exactly what you just talked about.  And then he said to me—two weeks later, he said, oh, my, when you look at this bill, you won‘t believe it.  It has so little to do with what we thought was going to happen. 


CRAMER:  I‘m just ashamed.

We should be in—one city alone, Boston, could eat through all that money.  This is just nuts, Chris.

MATTHEWS:  Yes.  Well, I don‘t know.  Every time I go through a big city, I wonder what‘s underground, the old sewer systems, the water systems...


MATTHEWS:  ... as I said, the old subway systems.  They‘re 150, 200 years old.  I said, what‘s down there?  It‘s going to fall in if we don‘t fix it.


MATTHEWS:  Let‘s fix that now.

CRAMER:  I would rather just...

MATTHEWS:  Let‘s put people to work with real jobs that pay $15, $20, $30 an hour, and let them get some double-time and golden time. 

That would seem to be the smart—look, what—well, let‘s give the president some credit here, the new president, Barack Obama.  He took out the ton of money in there, a lot of money in here, for contraceptives, condoms. 

CRAMER:  Right. 

MATTHEWS:  I—I have to tell you, if you want to have—if you want to have a balloon-head solution, I mean, literally balloon-head, put in some condoms into this thing, as—as some kind of a stimulus package. 

And he said, this is ridiculous.  He called up Henry Waxman and said, get that stuff out of there.  I don‘t know.  Who put this together.  This guy Darrell Issa, he‘s probably a lot more conservative even than you.  But he says it‘s one big earmark, the whole thing.

CRAMER:  It is terrible. 

Look, you could—we have 50 percent capacity decline in steel.  Production has declined 50 percent in this country.  You and I know that we could—just rebuilding one city, we could use up our steel production.  But we‘re not even going to dent our steel.  We‘re not even going to put 10 percent of our orders in steel. 

It is incredible to me how much capacity there is out there, but Caterpillar laying off people.  Why aren‘t we buying everything that they make...

MATTHEWS:  I don‘t know.

CRAMER:  ... so that we know we can build roads?  You need a Caterpillar to build a road.  You can‘t do it without it. 

MATTHEWS:  Well, hey, look, if the Democrats are pro-union, they should call up the construction union guys, the trades, the construction trades, and say, what are you ready to build?  We have got the money. 

CRAMER:  Right.  

MATTHEWS:  Anyway...

CRAMER:  Right. 

MATTHEWS:  ... I don‘t know why they don‘t it.  Anyway, put the hardhats on. 

Thank you very much, Cramer.

CRAMER:  I agree.  Thank you. 

MATTHEWS:  You and I agree. 

CRAMER:  You bet.

MATTHEWS:  Get the—get the—get the trucks rolling. 

CRAMER:  Exactly. 

MATTHEWS: “Mad Money” airs, by the way, weeknights at 6:00 and 11:00 Eastern on CNBC. 

Up next:  President Obama wants Washington to toughen up.  He‘s talking—actually about the weather here, about how many sugarplums you have in the city.  By the way, you come to Washington during the snow, everything stops. 

Anyway, the president‘s Windy City rebuke of this city that is not ready for snow. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” 

Washington is a winter wonderland tonight, as Congress votes on Barack Obama‘s historic economic recovery bill, the problem being that this capital cannot—cannot—deal with bad weather, treating every snowfall as something absolutely unknown, unpredictable, indeed frightening.  This city freaks out when it snows. 

Here‘s the man from Chicago, home of the Bears, mocking the sugarplums. 


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  My children‘s school was canceled today, because of what? 


OBAMA:  Some—some ice? 


OBAMA:  I don‘t know.  We‘re going to have to try to apply some flinty Chicago toughness to this town. 



MATTHEWS:  Well, timing is everything in politics, Tip O‘Neill used to say. 

And Al Gore, who looks a lot better now than he did in 2000, can‘t seem to get his message pegged to the backdrop.  Last time he came to Washington to sell global warming, this city was a meat locker.  And you guessed it.  He showed up today with the same message of global warming with the city today under ice. 

Time now for tonight‘s “Big Number.” 

Talk ain‘t cheap, especially if you‘re Bill Clinton.  With Hillary in as secretary of state, the Clintons filed their 2008 financial disclosure forms yesterday, detailing the former president‘s earnings from overseas speaking engagements, among them—catch these numbers -- $350,000 from a bank in Kuwait for one speech, $300,000 from a company, a car company, in Hong Kong, one speech, and a million dollars for one speech from a motivational firm up in Canada, a million for a speech. 

“The Wall Street Journal” finds that, all in all, Bill‘s haul last year from overseas speaking engagements came out to $4.7 million.  I wonder if he gets the same—gets to give the same speech everywhere he goes for the big money. 

Anyway, the former president has agreed to have ethics officials at the State Department review all of his future engagements to guard against conflicts. 

Former President Bill Clinton‘s $4.7 million in foreign speaking honoraria—tonight‘s “Big Number.” 

Up next:  Is it smart politics for President Obama and the Democrats to keep targeting Rush Limbaugh?  Well, it could be.  They‘re defining Rush Limbaugh as the face of the Republican Party.  It may be working, may not.  It‘s certainly working for Rush.  It may not be working for the Republicans.  We will see. 

You‘re watching HARDBALL, only on MSNBC.  


REBECCA JARVIS, CNBC CORRESPONDENT:  I‘m Rebecca Jarvis with your CNBC “Market Wrap.”

Stocks rallying on reports the Obama administration is close to a plan to buy up bad assets from banks.  The Dow Jones industrials surged 200 points.  The S&P 500 gained 28 points.  And the Nasdaq climbed 53 points.

After a two-day meeting, Federal Reserve policy-makers announced they would leave key interest rates at record low levels for some time.  They also said the Fed is prepared to buy longer-term treasury securities, which would drive down longer-term interest rates of all types. 

More massive layoffs announced—Boeing says it will cut 10,000 jobs, or about 6 percent of its work force.  Boeing also reported a surprise fourth-quarter loss. 

Meantime, Starbucks says it will close another 300 stores and eliminate nearly 7,000 jobs worldwide.  After the closing bell, Starbucks reported quarterly earnings that missed analyst estimates—and now back to HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Lately, Rush Limbaugh has been in the political fray more than ever. 

Is that good for the Democrats or the Republicans? 

Joining me is former House Majority Leader Dick Armey and Salon‘s Joan Walsh. 

Let me play you something.  This was Monday here on HARDBALL, when this stinkeroo got started.  Let‘s take a look at it.


MATTHEWS:  Congressman Gingrey, you first. 

Do you believe that this is a redistribution plan to basically take taxes completely off the backs of poor people by saying, even if you have to pay payroll taxes, Social Security and Medicare taxes, we‘re going to give you an offset in terms of tax-cutting, a refundable tax credit, so you never have to pay taxes again, and this is a political scam to get poor people to vote Democrat into the foreseeable future? 

Is this the game?  Is Limbaugh right?

REP. PHIL GINGREY ®, GEORGIA:  Chris, I don‘t think that Rush Limbaugh is right on that.  At least, I hope he‘s not right. 


MATTHEWS:  Well, he apparently went further later on and said that he didn‘t think Limbaugh was right again to “The Politico.”  This is Congressman Gingrey—Gingrey. 

He says: “I mean, it‘s easy if you‘re Sean Hannity or Rush Limbaugh or even sometimes Newt Gingrich to stand back and throw bricks.”

Well, today, Gingrey apparently decided it‘s time to apologize and get some forgiveness from the big guy on the radio.  Here he is saying, “I was wrong to go against Rush.”

This is a U.S. congressman talking.


GINGREY:  Well, I clearly ended up putting my foot in my mouth on some of those comments.  And I just want to tell you, Rush, and—and all our conservative giants, who help us so much to maintain our base and grow it and get back this majority, that I regret those stupid comments. 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Well, I—look, I appreciate that. 


MATTHEWS:  That—that groveling.

Former U.S. Congressman Dick Armey, doesn‘t the station of U.S.  congressman require something higher than that kind of performance before the altar of the beneficence of Rush Limbaugh? 




MATTHEWS:  What did he say, giants like you and excuse me for living, and I don‘t know what else he threw in there. 


ARMEY:  Well, I will tell you what happened.

First of all, people need to understand, Rush is Rush, and he makes his living being outrageous a big part of the time.  But, at the same time, he‘s expressing the—the frustrations of a lot of small-government conservative grass—rank-and-file all over the nation.  And, so, they relate to them. 

When—when the congressman sort of put him down, he heard from a lot of real people in Georgia about it.  That—he‘s not—he‘s trying to make peace with Rush...


ARMEY:  ... in order to get real people to—to let him off the hook. 

MATTHEWS:  But Rush is making a real charge.  I want to know if you agree I hit.  Then I will get to Joan.

Rush is saying the Democrats have a political plan here, basically, get rid of all federal taxes for poor people by giving them tax credits if they don‘t pay income taxes.  Give them tax credits against their payroll taxes, so that, even if they go to work and you have to pay withholding, they end up getting it all back.  They never end up paying any taxes into the future, so they will always vote Democrat, poor people, because Barack Obama got rid of taxes for them. 

He says, that‘s a strategy.  It‘s not a stimulus package; it is a brilliant game plan to buy poor people‘s votes.  That‘s what Rush is saying.  Do you agree with him? 

ARMEY:  No, I...


MATTHEWS:  Do you agree with him?  Do you agree with Rush? 

ARMEY:  I understand—I understand—no, I...

MATTHEWS:  You don‘t agree with Rush?  OK.

ARMEY:  I don‘t agree with Rush. 


ARMEY:  I think—but even Charlie Rangel has very—said—clearly said he wants to redistribute a trillion dollars through the tax code.

The Democratic Party has consistently tried to redistribute income through the tax code.  And, in fact, today, under the tax codes that exist today, it is not at all difficult for people to qualify for enough tax credits to pay off any income tax they might owe and all payroll taxes...


MATTHEWS:  Right.  That‘s what we‘re talking about.

ARMEY:  ... and still have a refund. 


ARMEY:  That‘s already existing in the law. 

Now, what Rush might have—a point he might better have said is, if you want to stimulate the economy, use smart tax cuts that encourage savings and investment, the engine of growth, not using the tax code as an instrument of income redistribution. 

MATTHEWS:  OK.  I think they all want people to spend their money, not save it.  I don‘t know what the current strategy is. 

But, Joan, what do you make of the politics here?  This is a pretty strong charge from Rush.  I think it was backed up—well, it‘s—I guess it‘s, in effect, backed up from people like Phil Gingrey, the congressman, because he came back and groveled before the altar of—of—of—God, of Rush Limbaugh.  What a sight. 


JOAN WALSH, EDITOR IN CHIEF, SALON.COM:  You know, with all due respect, with all due...


MATTHEWS:  You see who‘s got the power here.

WALSH:  Yes, he‘s licking his boots.  Let‘s be honest.  Have you ever seen anything more pathetic than that display?

And, with all due respect to Dick Armey, this is not about the tax code.  This is not about smart tax policy.  This is not about the stimulus.  This is about the politics of resentment.  And this is about Rush Limbaugh playing up Democrats against Republicans. 

I mean, you know, we haven‘t talked about the most...


WALSH:  ... disgusting thing that Rush said, which is that...


WALSH:  no, no, let me finish. 


MATTHEWS:  No, no, this show is HARDBALL. 

Joan, you have cued me.  Here he is, the most disgusting thing he ever said...

WALSH:  Oh.  Good.  My mom will be happy I didn‘t say it. 

MATTHEWS:  ... last week.  I—no, thank you for cueing it. 

Here it is.  Here‘s Rush Limbaugh last week. 


LIMBAUGH:  We‘re being told that we have to hope he succeeds, that we have to bend over, grab the ankles, bend over forward, backward, whichever, because his father was black, because this is the first black president. 


MATTHEWS:  What do we make of that, that we have to bend over, grab the ankles, bend over forward, backward, whichever, because his father was black? 



MATTHEWS:  What is this?  What is this?  Is this...

WALSH:  Did one person, did one Republican think of apologizing to President Obama for such an obnoxious, sickening thing?  I mean, come on, this is what we‘re talking about. 

ARMEY:  Oh, oh, give it a rest. 


ARMEY:  You know, Chris, you and I have talked about this before.  We had a—a situation where the Bush White House reframed something that—that Kerry said, and then feigned moral outrage. 


ARMEY:  Political discourse...


MATTHEWS:  We‘re playing the tape. 

ARMEY:  No, wait.  No, let me make my point.

MATTHEWS:  Congressman, we played the tape, so there‘s no rephrase. 

ARMEY:  Political discourse—political discourse is inane. 

Rush makes his living out of political discourse. 

MATTHEWS:  Right. 

ARMEY:  Now, serious people that have serious things to concern themselves with need to get about their business and not be bothered by...

MATTHEWS:  OK.  Let‘s get...


ARMEY:  ... of political hacks.

WALSH:  Phil Gingrey doesn‘t...


MATTHEWS:  Is he right?  Is he right? 


WALSH:  He should apologize? 

MATTHEWS:  I‘m sorry. 

WALSH:  Phil Gingrey is right to apologize?  Isn‘t he—shouldn‘t he get about his business and...

ARMEY:  I think Phil Gingrey is trying to make peace with a lot of voters in his district that are—that are—have a constituent following to Rush Limbaugh. 

You have to take the world in which you run for office as it is.  And if your voters are going to side with a guy on the radio, in opposition to you, you better, in fact, make peace with your voters, because, in the end, that‘s the votes he‘s got to deal with. 


MATTHEWS:  Joan, you have opened a can of worms here. 

Why do libertarians—and I respect a lot of the libertarian philosophy.  It‘s—at least in ideal terms.  The Ayn Rand stuff, it‘s—

I love the idea.  It‘s romantic.  If everybody could live on themselves and take care of themselves, if that could work—it doesn‘t—fine.

But why do people who say they‘re individualists, cowboys, out there all alone, refer to themselves as dittoheads?  Why would you take pride in being a ditto of what Rush Limbaugh says, in other words, repeating after him every word he speaks as if it‘s gospel?  And it—it doesn‘t make any sense.  How can you be both a dittohead and an individualist? 

WALSH:  And an individualist.

ARMEY:  It‘s hard for me to understand.


MATTHEWS:  It makes no sense to me.

ARMEY:  I mean, again—again, Chris, I‘m not here to explain or to defend anybody‘s discussions in politics...


ARMEY:  ... because politics is—and I‘m the first to say it, and I have said it for years—is juvenile delinquency. 

I‘m saying, get beyond it...


ARMEY:  ... and get to the serious policy issues. 

MATTHEWS:  OK.  What‘s the serious economic...


ARMEY:  There are serious—there are serious...


MATTHEWS:  ... made here by the right?

ARMEY:  There are serious tax policies that could be pursued that would encourage growth and job creation in the economy. 

MATTHEWS:  OK.  What would be the Dick Armey...

ARMEY:  They‘re not being pursued. 

MATTHEWS:  What would be the classic Republican or conservative economic program to get us out of this—away from this abyss we‘re facing right now in the economy? 

ARMEY:  Obviously, smart tax cuts and then—after the fashion of the supply side tax cuts that worked so well for two decades. 

MATTHEWS:  Like Bush gave us the last eight years. 

ARMEY:  I‘m not here, and I‘ve never defended Bush‘s tax—income redistribution as tax policy does not grow the economy.  Doesn‘t matter who does it. 

MATTHEWS:  What we got from Bush were tax cuts for the very top. 

ARMEY:  Very, very, very nominal growth components to the Bush tax cuts.  There were some.  But they were overtaken by the income redistributionists.  And that was the problem with the Bush tax package. 

WALSH:  Who are the income redistributionists? 

ARMEY:  Who what? 

WALSH:  Who are the income redistributionists? 

ARMEY:  Well, the biggest income redistributionists at that time was a Republican senator.  But Charlie Rangel cracked me up.  Charlie said, look, you guys are giving her things I wouldn‘t even ask for. 

MATTHEWS:  Who is that you‘re talking about?   

ARMEY:  I‘m not going to get into that, because then we‘ll have the controversy.  Dick Armey is assaulting somebody.  The fact of the matter is there are income redistributionists that think they‘re going to curry favor with voting blocs in both parties.  And it‘s wrong policy, whether it comes from Republicans or Democrats.  It makes no sense. 

Armey‘s axiom, don‘t let politics define your economics.  Don‘t let politics define anything.  Politics is silly.  It‘s inane.  Practitioners of politics are people who—take what amusement you can from them, but don‘t take them seriously. 

WALSH:  But this is serious business.  The economy is a wreck and it‘s been wrecked by the Bush White House and by Republicans in Congress with a lot of Democratic help, with a lot of help.  And now President Obama—

ARMEY:  Give it a rest. 

WALSH:  Please stop saying give it a rest.  Do you have anything else to say?  President Obama has a mandate for change.  Your people have stood in his way.  They‘re standing in his way on Capital Hill right now.  And Rush Limbaugh making ridiculous statements and Republicans are crawling to him and groveling.  That‘s the state of our economy and our world right now, Representative Armey.  It‘s sad. 

ARMEY:  I‘m so damn glad that you can never be my wife, because I surely wouldn‘t have to listen to that prattle from you every day. 


WALSH:  That was really an outstanding comment. 

ARMEY:  Look, ma‘am, are you kidding?  You‘re talking like a paid political hack here. 

WALSH:  Am I, sir? 

ARMEY:  Are we going to talk seriously—

WALSH:  No, I actually care about social justice.  I care about jobs. 

I care about the economy. 

MATTHEWS:  What‘s the best—Joan, as you look at this package, what‘s the solid piece of it that‘s going to help the economy recover?  What‘s the strongest piece of the economic bill that‘s being passed by the House tonight?  What‘s going to work?

WALSH:  I think the stimulus will work and I think it needs to be bigger.  I agree with Jim Cramer.  I think the issue of giving people who pay payroll taxes, but make too little to pay income taxes, I think that does stimulates the economy.  It‘s also a matter of fairness.  This is a longtime Democratic principle, Chris, to make work pay.  Democrats passed welfare reform.  It was very controversial with their base.  It was actually a courageous and controversial thing to get people off welfare and into the workforce. 

And it was going—yes, it was going to be backed with the Earned Income Credit to help families, parents who make too little to pay taxes actually pay for child care, pay for health care, pay for their children‘s clothes.  And it is both a progressive and pragmatic piece of policy.  We‘re talking policy here.  Thank you, Chris. 

ARMEY:  First of all, let me remind you—

MATTHEWS:  I thought it was very well said and it was not prattle.  It is what I believe, actually.  Actually, I believe it.  I think the Earned Income Tax credit has been abused around here, but it does make sense to encourages people who are at the margins, who could sit on welfare, to say, no it‘s better to put 40 hours of work in if you don‘t make enough money.  It‘s still better to make an effort.  Anyway, thank you, Dick Armey. 

ARMEY:  Can I make one point?  The Republicans passed welfare reform.  Clinton vetoed it twice.  Then, when he signed it, he said it was the best idea he ever had. 

WALSH:  He did with the kind of support that it needed. 

MATTHEWS:  That‘s how desperate you are.  Thank you.  Dick Armey citing Bill Clinton as his economic expert. 

Up next, President Obama tackles the economy and talks about the need to cut waste and be transparent.  He‘s talking like Reagan, according to Pat Buchanan.  Is he borrowing a page from the Gipper‘s playbook?  This is HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back tonight.  We talk about a rare sight in Washington we saw today.  That‘s a Democratic president standing among business leaders, delivering a strong message on the economy.  But a certain kind of message.  Here it is. 


OBAMA:  We will launch a sweeping effort to root out waste, inefficiency and unnecessary spending in our government.  And every American will be able to see how and where we spend taxpayer dollars by going to a new website called 


MATTHEWS:  Is that Barack Obama or is that the promises of Ronald Reagan?  Joining me tonight for the politics fix MSNBC political analyst Michelle Bernard and “New York Times” columnist, the great columnist Bob Herbert.  Bob, I want you to start—I don‘t know whether we‘re getting a little bit of salesmanship here.  Is this economy going to be fixed by pruning federal programs or by picking the right ones to put our money behind?  I mean, I think you are more with me on this.  It has to be—we need some juice here.  We need some bulk and action here, not some paperwork reduction program here at this point. 

BOB HERBERT, “THE NEW YORK TIMES”:  We need some juice and some action.  Before we get to that, I just would like to make the point that I think Dick Armey was so far out of line in the last segment with his sexist comments, and he owes Joan Walsh and your viewers an apology.  So I just wanted to make that point. 

Getting back to the stimulus package, I do agree with you.  I think that the stimulus package needs to be bigger.  I would like to see fewer tax cuts, much more infrastructure spending.  And the focus should be, like a laser, on jobs, jobs, jobs. 

MATTHEWS:  So you so you want to see—what do you think, Michelle?  I just wonder whether there‘s too many cats and dogs in this thing for people to get a sense of what we‘re doing here. 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  I think it is almost impossible, at least it seems so far, to let people know exactly what it is we‘re doing.  I don‘t think anyone knows the answer.  I think it‘s finding the right balance between tax cuts, a stimulus plan, but also not throw so much stuff that the American public thinks this is just a big joke. 

I mean, during one of the commercial breaks, we heard about Starbucks laying off another few thousand people and closing more stores.  People are losing dollars and losing their jobs every single day.  I don‘t think anyone in the American public has heard anything that sounds like it‘s going to work.  It seems like we‘re throwing a lot of money at the problem.  Lots of the economists tell us that we need to do that.  But we‘re not hearing a lot about spending cuts.  I think that‘s an important part of the package also. 

MATTHEWS:  Back to the point I raised initially, Bob.  Do you think the president can make both points at the same time?  We need to spend more money and we have to spend it more carefully.  I wonder if that is getting a little too complicated? 

HERBERT:  It is complicated.  I do think that there are good points to this package.  I do think it—you know, it will put some significant amounts of money into circulation.  But I‘m not sure if you‘re talking about actually stopping the hemorrhaging of jobs.  And certainly, it‘s not big enough to fix the economy. 

I see this stimulus package as a first step.  I think the economic problems will continue.  And then, you know, I‘m just assuming that before we get very far down the road, the administration and Congress are going to have to do a heck of a lot more. 

MATTHEWS:  I‘m just—that‘s the main point, I guess a good point.  We don‘t know whether what he‘s doing this week and gets passed by mid-February is enough.  But we won‘t know it‘s enough until at the end of the year. 

BERNARD:  Exactly, eighteen months from now.

MATTHEWS:  We don‘t know whether we‘ve done enough until it‘s too late to do anything about it. 

BERNARD: It‘s a serious problem.  I think we should also be thinking about who his audience was today.  Maybe his message is a little bit different depending on who the audience is. 

MATTHEWS:  Maybe he‘s playing to your crowd.  Moderate Republicans—no.  I see moderate Republicans, somebody in that sort of business community he‘s talking to. 

BERNARD:  I am an independent.  I‘ll tell you, one of the things he said is business is not the—business is the engine of growth, not the government.  That‘s an important line for business people, whether they are Democrats or Republicans.  They want to know that he‘s not playing class warfare.  He‘s not going to say that corporations that are doing their best to keep the American public employed are the new axis of evil in the Obama administration.  I think that‘s a very important message that he was trying to get across today. 

MATTHEWS:  I think the class warfare issue is a good one, because that‘s what we‘ve had for the past several years.  We‘ve had class warfare, where there‘s been—you know, they were talking about in the last segment redistribution of wealth.  What we‘ve had is redistribution of wealth up to those who are already very wealthy.  That‘s one of the reasons why we‘re having these terrible problems in the economy night. 

BERNARD:  I think he recognizes that if you say to the people who are wealthier, the people who are running corporations, that we‘re going to take even more from you, what those people will turn around and say is, we‘re going to have to lay off even more people.  He‘s trying to strike the right balance. 

MATTHEWS:  We‘ll be right back with Bob Herbert and Michelle Bernard for more of the politics fix. 


MATTHEWS:  We‘re back with Bob Herbert of the “New York Times” and Michelle Bernard for more of the politics fix.  We had a rather rough back and forth.  I think Dick Armey—I like the guy.  But I think he went way over board going after Joan.  You have to let the other person make their point without a reference to your wife, or whatever this gender aspect that shouldn‘t have been brought up. 

Anyway, here‘s Congressman Phil Gingrey of Georgia basically groveling before the alter of Rush Limbaugh today.  This is really—I don‘t know what staffer got him into this position.  Listen to this thing. 

We‘re digging for it.  Basically, he said something here earlier in the week about how Limbaugh was really easy to be rich and make all kinds of comments as a talk show host.  But it‘s different when you‘re elected to be a leader in the Congress.  You have to take different, more nuanced positions. 

Then he came back, no it‘s OK to be a well-paid talk show host and say what you feel like.  That speaks for me.  Here he is adjusting his position for Rush. 


REP. PHIL GINGREY ®, GEORGIA:  We‘ve got to have your support.  And, of course, I know you reach millions of people across the country.  I tell you, I‘ve heard from quite a few of them since my foot and mouth disease yesterday. 


MATTHEWS:  Then rush grandly, grandiosely allows the supplicant to rise.  Bob Herbert, it‘s unbelievable.  (INAUDIBLE)  It almost had the incensor out there.  Oh, great man, I‘m here to serve you. 

BERNARD:  Rush will tell you he has 20 million listeners to his radio show. 

MATTHEWS:  Ditto heads.

BERNARD:  Ditto heads is a term I‘m just learning from you. 

MATTHEWS:  That‘s a positive term. 

BERNARD:  Well, that‘s great.  He‘s got 20 million listeners.  They are people who are very dedicated to Rush Limbaugh.  I would suspect that what we saw from this member of Congress is that his constituents were up in arms—

MATTHEWS:  Right. 

BERNARD:  -- very much like Rush Limbaugh, and wanted him to go and apologize. 

MATTHEWS:  Bob, this gets to the very heart of what you talked about, the Limbaugh constituency.  It is a support group.  He is a support group for mainly men, I think, traveling around the country trying to sell product between 12:00 and 3:00 Eastern.  They‘re out there working hard.  They‘re trying to meet sales quotas.  I guess, they feel under-appreciated by their families, by their bosses.  He says, look, you‘re the guys carrying the load.  It‘s those people out there who are not working, the ones getting the free tax ride, they‘re the ones we‘ve got to get.  That‘s what he‘s playing to. 

HERBERT:  That‘s exactly what he‘s playing to.  What I think is interesting is apparently the Ditto Heads are in Congress as well.  You have Republican members of Congress who feel free to openly criticize President Obama.  But if they criticize Rush, then they have to genuflect and kiss his ring.  I find that fascinating. 

MATTHEWS:  And by the way, we keep all our references here ecclesiastical and liturgical.  We don‘t have sexual references here.  Thank you very much, Bob Herbert, you‘re the best.  Thank you, Michelle Bernard.  I did think you‘re a Republican.  I guess you‘re in the middle.  Anyway, join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.



Copy:     Content and programming copyright 2009 MSNBC.  ALL RIGHTS RESERVED. 

                Transcription Copyright 2009 CQ Transcriptions, LLC  ALL RIGHTS  RESERVED.

                No license is granted to the user of this material other than for research.

                User may not reproduce or redistribute the material except for user‘s

                personal or internal use and, in such case, only one copy may be printed,

                nor shall user use any material for commercial purposes or in any fashion

                that may infringe upon MSNBC and CQ Transcriptions, LLC‘s copyright or

                other proprietary rights or interests in the material. This is not a legal

                transcript for purposes of litigation.


Watch Hardball each weeknight